PCG – Presenting at both the Midwest Convention
Ladies and Gentlemen in Pawnland!
Here is an interesting read on EZ Corp we pulled off the wire today. I would like to point out that with EZ’s current Market Capitalization rate, they have finally succeeded Cash America and have become the most highly valued publicly traded Pawn Company in the world today! What a feat for a company that had a lot of obstacles in the path to their success.
3 Stocks to Beat a Recession
By Rich Duprey |
Even though the Dow remains above the 12,000 mark, investors should still consider how a renewed recession might affect their portfolios. Before you panic and put your entire portfolio into cash, consider looking into stocks that have the ability to hold up in tough times.
I used the Motley Fool CAPS supercomputer to seek companies that have proven to be less volatile than the market, but which have been reporting strong revenue and earnings growth over the past few years. With a beta less than 1, these companies ought to react less violently to any market swoon.
By seeking cheap stocks with lower-than-average P/E ratios, we build in a margin of safety. And with the CAPS community according them high ratings, these stocks could also turn in terrific performance.
The following handful of stocks look like they could do well in any extended downturn.
| Stock | CAPS Rating (out of 5) | Beta | 3-Yr Avg. Rev. Growth | 3-Yr. Avg. EPS Growth | PE Ratio |
|---|---|---|---|---|---|
| EZCORP (Nasdaq: EZPW ) | **** | 0.8 | 21% | 23% | 14.9 |
| Neutral Tandem (Nasdaq: TNDM ) | **** | 0.8 | 28% | 36% | 17.5 |
| Richmont Mines (NYSE: RIC ) | **** | 0.8 | 32% | 18% | 15.4 |
Source: Motley Fool CAPS Screener.
Do you hear that?
If the TV show Pawn Stars is any indication, being a pawn broker is a lucrative business — not to mention a heckuva lot of fun. Given their recent performance, EZCORP and First Cash Financial (NYSE: FCFS ) would likely agree. The gold rush on commodities that boosted prices for precious metals was a boon to pawn shop operators, and with the economy still sucking wind, even the payday lending side of their operations could see an uptick in traffic.
Despite the federal crackdown on payday loans, even a lender like Advance America (NYSE: AEA ) has watched its stock rise 34% year over year. Companies less exposed to the vagaries of regulators — short-term and payday loans comprise just 11% of First Cash’s revenue, and 16% at EZCORP — have turned in even better stock performance. First Cash is up 80% year over year, while EZCORP is up 73%.
EZCORP has been one of my top picks on CAPS for years, and themuffinking believes that it will only continue getting better:
There are a couple factors that move [EZCORP]. A big one is gold-higher gold prices mean EZCorp makes a higher profit in its pawn shops. Another is the rate of under-employment-people who feel they’re not making enough money, go to EZCorp for payday loans. So the more apocalyptic the outlook-buy gold! the dollar is collapsing! nothing is safe!-the higher [EZCORP] will go. And 110 new stores in 2011 doesn’t hurt.
Sincerely,
Jerry Whitehead
Pawn Shop Consulting Group, Inc.
www.pawnshopconsultinggroup.com
954-540-3697